Archive for April, 2014

What a Shame

CMS has decided to raise rates for private Medicare Advantage (MA) plans. This is contrary to its earlier announcement that private Medicare reimbursement rates would be reduced to reflect slower per capita growth in Medicare and health care. Politicians from both parties and insurance companies called for this change and, unfortunately, CMS reversed course.

So, private Medicare will continue to cost more than it would cost to serve similar beneficiaries in traditional Medicare. While this may be good for insurance companies that offer MA plans, it is not good for Medicare, the vast majority of Medicare beneficiaries, or taxpayers.

Why should we spend more of our limited public funds on private Medicare when traditional Medicare costs less? Why should taxpayers ensure private profits to deliver public Medicare coverage? After all, the experiment in privatizing Medicare was originally intended to see if a private model would cost less, while providing the same or better coverage than traditional Medicare. That was not to be.

Private plans left the market when their reimbursements were capped at or below the per capita rate of public Medicare. CMS failed to learn from that experiment, and maintain the cost of traditional Medicare as the maximum taxpayers would pay for private plans. Instead, since the Medicare Act of 2003 we actually pay private plans more than traditional Medicare. This result is not good for the financial security of the Medicare program or for the federal budget deficit. It’s not good for the vast majority of beneficiaries who continue to choose the traditional Medicare program. It’s not even best for many MA enrollees, particularly those with long-term and chronic conditions, who often get less coverage than they would in traditional Medicare. And remember, by design MA plans have limited networks, so private MA enrollees have fewer choices in physicians and other health care providers than they’d have in traditional Medicare.

The Center for Medicare Advocacy continues to call for parity in payments between private Medicare plans and traditional Medicare. It’s the best deal for taxpayers, the Medicare program, and the vast majority of Medicare beneficiaries. Common sense should prevail.

April 8, 2014 at 7:17 pm 2 comments

The Ryan Budget: Déjà Vu All Over Again (Again)

On April 1st Representative Paul Ryan rolled out yet another “Path to Prosperity,” as he annually calls his budget.  Unfortunately, the budget is a repeat of past year plans and is not a path to prosperity for most Americans – or for Medicare.

Once again, Rep. Ryan’s budget proposes a private approach to Medicare:

For future retirees, the budget supports an approach known as ‘premium support.’ Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program.

Rep. Ryan has proposed “premium support” for future Medicare participants many times in the past.  While his budget assures us that “this is not a voucher program,” it is, once again, a proposal to pay a certain amount towards private insurance for Medicare beneficiaries. Ironically, Mr. Ryan states such insurance plans “would be available in a newly created Medicare Exchange.” This is ironic because the proposal is remarkably similar to the Affordable Care Act marketplace that is so maligned by Mr. Ryan and his colleagues.

Rep. Ryan suggests that changing Medicare to premium support is needed because

the government has been … a clumsy, ineffective steward of value. Controlling costs in an open-ended fee-for-service system has proved impossible to do without limiting access or sacrificing quality.

In fact, over the last few years traditional Medicare per-capita cost growth has declined, leading the way to parallel reductions in the rise of overall healthcare costs.

The unnecessary costs for the government, taxpayers, and all Medicare beneficiaries that need controlling are the hundreds of billions of dollars in excess payments to private Medicare Advantage plans under Medicare Part C and private pharmaceutical companies under Medicare Part D.  These unnecessary private industry payments are the real threat to Medicare’s future.  If Mr. Ryan’s goal is really to save money and preserve a strong Medicare program, he would look to these cost overruns for savings. He certainly would not propose further privatizing Medicare.

However, the latest Path to Prosperity does again seek to privatize Medicare. At the same time it would reduce Medicare’s value to older people and people with disabilities by:

  • Increasing the age of eligibility to 67.
  • Charging more for Medigap coverage.
  • Combining Parts A and B cost-sharing, thereby increasing costs for most beneficiaries.
  • Increasing premiums for more beneficiaries.

Regrettably, the Ryan plan may provide a continued path to prosperity for private insurance and pharmaceutical companies, but it is a dead end for Medicare, older people and people with disabilities.

April 3, 2014 at 8:26 pm 1 comment


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